Buying land or a garage?

Question

So I bought a house in upstate new york that has an in law suite near saratoga. I am wondering if i am losing out on money by renting long term?

second question I saw there is 20 acres of land across the street for sale and was wondering if I should grab it and subdivide a few acres and sell or rent out to get my money back?

the other option i have is build a 3 car garage and out a one bedroom apartment on top that ill rent for about $1500 a month.

The garage price would be about 100k to fo but could make 18k a year.

The land is $130k

What do you all think is the better strategy?

Kristine Ann · Answer

I lived in Saratoga Springs for about 10 years.  The people who come up for track season are rowdy, fussy, and very hard on a property.  They are partying, drinking, playing loud music, burning their BBQ, smoking, and throwing up all over the carpet and couches. If you are renting long term, I wouldn't rent out the in-law apartment out of respect for the long term tenants (and your property).  Imagine the worst college frat parties combined with the most obnoxious customers, combined with the highest expectations for nice furnishings.

The people that are saying $8-12k are exaggerating. That would be for a very high end full house with weekly cleaning and amazing furnishings one block from Broadway or the track.  You have to spend money to completely furnish the place with espresso machines and nice furniture.  You also need to replace the carpet and couches after each summer because they will be ruined.

The summer people are really obnoxious and destructive and not worth it.

Christopher Pennington · Answer

Well I am going to rent my in law put for track season and probably get a hot tub to get more interest. A property manager has told me I can get 8-12k a month for my in law apartment so that sounds pretty good to me and I can build funds.

Stefanie Gouvis · Answer

Track rentals typically make the most money if they are VERY close to the track. Otherwise maybe Airbnb would be best. There is also a large restaurant company here that I have been told needs rentals for a shorter term but pays very well to house staff that they bring in from out of town to work for them during high season. So maybe you could try to find something like that and do Airbnb in the meantime.

Subdividing is not super cheap, and vacant lots typically sit on the market longer than homes do, but it could be a good opportunity if you have funds available to purchase the lot and to pay for subdividing services. Might take a while to fully cash out but depending on the location of that land it might be a smart thing to do.

Doug Spence · Answer

If you can rent it out as a STR for 10k/month then it sounds like you can make more money doing that compared to a long term rental. STR's require a lot more work though - its definitely not passive. Plus you'll have to pay to furnish the space, if it isn't already furnished.

A buddy of mine @Brian Green is a local real estate expert there in Saratoga. He may be able to give you good insight on the STR question, as well as the development question.

Christopher Pennington · Answer

Well when I ask if I am losing money I mean if I am losing because I am not doing short term rentals. Saratoga county has track and other seasons that people rent places for bug money, I'm talking like 10k a month.

I have no experience subdividing so it would take work. The garage though could be built in 2 months and I could start renting out soon after.

Doug Spence · Answer

@Christopher Pennington When you ask if you're losing money renting out long term, what are you comparing it with? Renting out as a short term rental?

For your second question, do you have experience subdividing acreage? Or do you know someone that has? I imagine its a lot of work and not something you can just do quickly or easily - especially in New York.